69th SWCS International Annual Conference July 27-30, 2014 Lombard, IL

1. Michelle Perez, Senior Associate for SWCS Lombard, IL, July 29, 2014
IMPROVING WATER
QUALITY
A National Modeling Analysis on Increasing Cost
Effectiveness through Better Targeting of U.S. Farm
Conservation Funds

2. IMPROVING WATER QUALITY
THROUGH BETTER TARGETING
wri.org/water/water-quality-targeting
July 28, 2014 MRBI Presentation at SWCS
July 29, 2014 National Analysis Presentation at SWCS

3. RESEARCH QUESTIONS
1. How cost effective is the current (BAU) approach?
– BAU=spending on nutrient & erosion control practices: ’06-’11
2. How much more effective could it be with targeting?
– 3 targeting approaches
3. How do results change depending on what
environmental benefit is being optimized?
– N, P, & sediment reduction & soil C sequestration
4. If programs were designed to achieve the most cost-
effective benefits, where would the funds be spent?

4. DEFINING TARGETING
• Geographic targeting –
Prioritizing areas:
a. Greatest environmental
impairments
b. Pristine conditions
c. Greatest change in
environmental conditions
possible
• Benefit-cost targeting –
Identifying acres and
practices that can produce
the most environmental
benefits per dollar spent
(e.g., most pounds of N
reductions/$)

5. DATA & MODELS
• Farmer survey data
from Natural Resources
Inventory-Conservation
Effects Assessment
Project (NRI-CEAP)
• Agricultural Policy
Extender (APEX) model
• Economic optimization
model

6. MODELING LIMITATIONS
• Geographic targeting -
Prioritizing areas with
greatest change possible
• Model analysis is at edge-
of-field
• Doesn’t account for where
acres are vis a vis impaired
water bodies
• Prioritizes acres that offer
the biggest edge-of-field
pollution reduction
opportunities

7. 201 4-DIGIT WATERSHEDS
& ESTIMATING BAU COST EFFECTIVENESS
BAU $ spent in
each watershed
on average
# lbs. N reduced
at edge‐field in
each watershed
$/# lbs. N reduced = level
of cost effectiveness in
each watershed

8. 3 TARGETING APPROACHES IN MODEL

9. DUAL TARGETING MORE EFFECTIVE THAN BAU
12 x
8 x
8 x
7.5 x

10. DUAL TARGETING IS MOST COST EFFECTIVE
• Geographic + benefit-cost targeting could
result in 7 to 12 times more environmental
benefits per dollar spent than BAU
• Benefit-cost targeting alone could achieve 4 to
9 times the benefits as BAU
• Geographic targeting alone could be better or
worse than BAU

11. CHOOSING WHAT TO TARGET
• Optimizing for
multiple benefits
(N, P, & soil C) yields
more co-benefits &
fewer trade-offs than
optimizing for
individual benefits
• If only 1 benefit can
be targeted,
optimizing for
phosphorus
reductions is best

12. TARGETING MAY MEAN MORE ACRES
16.8
12.8
8.7
Benefit‐Cost
Targeting for
Sediment
Dual Targeting for
Nitrogen
BAU
1.5 times
more acres
(Millions of acres)

13. BUSINESS-AS-USUAL ALLOCATION OF FUNDS

14. FUNDING ALLOCATIONS FOR
MULTIPLE BENEFITS OPTIMIZATION (N, P, C)

15. FUNDING ALLOCATIONS FOR
PHOSPHORUS OPTIMIZATION

16. FUNDING ALLOCATIONS FOR
NITROGEN OPTIMIZATION

17. FUNDING ALLOCATIONS FOR
SEDIMENT OPTIMIZATION

18. FUNDING ALLOCATIONS FOR
SOIL CARBON OPTIMIZATION

19. WHAT THIS STUDY IS & IS NOT
• Not an analysis of what NRCS could have
done in past due to
– Scientific & technical barriers
– Institutional & implementation barriers
– Social & political barriers
• Is an analysis of what NRCS could be
doing in the future

20. RECOMMENDATIONS
1. Track environmental benefits
2. Rank applications according to
benefit-cost ratios
3. Conduct pilot projects
4. Improve state funding allocation
formulas

21. Thank You!
Michelle Perez, PhD
202-729-7908
mperez@wri.org